Heavy discounts fuel only modest retail gains

In this photo of Oct. 25, 2010, women show off their shopping bags from Abercrombie & Fitch as they leave the Fifth Ave. store in New York. Retailers are reporting solid revenue gains for October. But it took heavy discounting on coats and other cold-weather items to get shoppers to spend amid unusually warm temperatures. (AP Photo/Mark Lennihan)
— AP

In this photo of Oct. 25, 2010, women show off their shopping bags from Abercrombie & Fitch as they leave the Fifth Ave. store in New York. Retailers are reporting solid revenue gains for October. But it took heavy discounting on coats and other cold-weather items to get shoppers to spend amid unusually warm temperatures. (AP Photo/Mark Lennihan)
/ AP

Target posted a 1.7 percent gain in October, slightly better than the 1.5 percent estimate from analysts. CEO Gregg Steinhafel said in a statement the results were at the low end of the company's expectations because of softness in the first half of the month.

Steinhafel noted traffic is healthy in stores, and the company is seeing essential items sell better than discretionary items. Target, which is counting on a much-publicized 5 percent discount to store credit and debit card holders, said it expects revenue at stores open at least a year to increase in the low-single-digit percentage in November.

Limited, the operator of Victoria's Secret, Bath and Body Works and other businesses, reported a 9 percent gain, well above the 6.1 percent forecast.

Gap had a 2 percent rise in October revenue at stores open at least a year; analysts had expected a 2.5 percent decline.

Department stores had a mixed performance. Macy's posted a 2.5 percent increase, though it said that sales in the beginning of the month were weak because of the warm weather. Analysts had expected a 1.6 percent gain. Terry Lundgren, Macy's chairman, president and CEO, said in a release that its new holiday gift shops are getting a good response from customers.

Luxury seller Saks Inc. enjoyed a 8.1 percent gain in revenue at stores opened at least a year, much better than the expected 2 percent increase.